Executive Viewpoint 2016 Prediction: CSG International – Three Predictions for Telecom
2015 was a big year for telecom, as mergers and acquisitions created a great deal of shake-up in the media landscape. From moves to merge Charter and Time Warner to AT&T and DirecTV, there is no doubt the industry is undergoing a major transformation to adapt to meet the demands of today’s consumers.
As we look toward 2016, service providers are increasingly pressed with the need to transform their business to better serve digital consumers, while also trying to manage traditional networks and systems. For a number of providers, this juggling act between “traditional” and “innovative” has become the new norm, but success has often been measured by a KPI-centric approach to operation and systems performance. In serving a more digitally-savvy and mobile consumer as we head into the new year, customer experience is emerging as a crucial metric, and is vital in creating a loyal customer base.
As service providers shift their focus, in order to introduce business models that best engage consumers and create steady revenue for 2016 and beyond, I predict three trends that will emerge to support the digital transformation:
1. A Focus on Improving the Quality of Experience (QoE)
According to Cisco, by 2019, consumer internet video traffic will be 80 percent of all consumer Internet traffic, making the Quality of Experience a crucial differentiator for digital service providers. QoE of streaming video in particular is directly impacted by video portability – consumers want to be able to watch at any time, from anywhere – they don’t want to be limited to viewing from their living room.
In 2016, service providers will focus on creating a seamless experience across devices – including phones, tablets, smart televisions and other streaming devices – that delivers a high level of QoE. Ensuring that consumers can use their services across devices and locations not only can reduce digital churn, but can create a more loyal customer who is willing to purchase additional services. If a provider can offer that same movie on any device using one digital login, the consumer will return for the ease and convenience of the experience.
2. A Shift to the Cloud
To drive better efficiency and true business outcomes, service providers need to embrace the shift to the cloud in the new year. IT departments are increasingly shifting from building their own infrastructures to consuming cloud-based solutions for PaaS and SaaS in order to expand offers and to speed up their go-to-market timing.
In the digital age, service providers need to take a new approach when thinking about the customer journey, and the people, process and technology that enable it. The cloud offers a new level of agility and flexibility to shape services in new ways that can help service providers capitalize on consumer demands.
3. Paving the Way for Innovation
To lead the charge in the growth and monetization of digital services in the new year, providers need to prioritize simplifying traditional services to drive down costs and create a balance between ordinary offerings and innovative ones. Creating an equilibrium between protecting traditional services revenue and creating a new, agile approach to the digital services business is critical to the provider’s long-term success. Whether this means exploring new business models or engaging with managed services providers, making room for innovation will be key for service providers in 2016 and beyond as digital services takes center stage.
As the telecom evolution continues to unfold in the new year, a focus on the customer experience is key for service providers looking to engage the next-generation consumers. By focusing on the quality of experience, implementation of new technologies, like cloud adoption, and balancing traditional and innovative offerings, service providers can position themselves for success in the new year.